US President Donald Trump.  (Reuters )
US President Donald Trump. (Reuters )

Tariffs on US goods may top agenda at Donald Trump-Narendra Modi meet

  • Proposal on WTO reforms also likely to figure in Sunday meeting between the two leaders
  • G7 leaders will hold a special meeting on Sunday at Biarritz on global economy and US’s trade initiative

GENEVA : US President Donald Trump is expected to press upon Prime Minister Narendra Modi during their scheduled Sunday meeting in France the need to reduce customs duties on American products, and consider positively the US’s proposal on reforms at the World Trade Organization (WTO) that are aimed at graduating countries such as India from availing special and differential flexibilities, analysts say.

Leaders of the G7 countries—the US, Germany, Japan, France, Britain, Canada and Italy—will hold a special meeting on Sunday at Biarritz on global economy and the US’s trade initiatives. The US has sought the special meeting to “highlight the need for WTO reform and press a controversial proposal to curb the ability of advanced developing countries like China and India to claim special treatment (at the WTO)," according to a briefing by senior US administration officials, the Washington Trade Daily reported on 23 August.

President Trump will issue a strong message at the meeting on Sunday “that the WTO must become an institution that can deal with the modern global economy—including the presence of non-market economies (such as China)". Trump is going to “tout his own trade and economic policies and point to strong US growth as compared to much of the rest of the world".

The US is also expected to raise its concerns “with host country France’s recent imposition of a digital service tax, arguing that it undermines the multilateral negotiations taking place at the Organization for Economic Cooperation and Development (OECD)".

President Trump will hold bilateral meetings with leaders from India, Germany, Britain, Canada, Japan and France, among others, on the sidelines of the G7 meetings. Although India is not a member of the G7 club of seven industrialized countries, it is going to Biarritz for the bilateral meeting with President Trump.

“With Mr Modi, the discussions will focus on how the two countries cooperate more closely on trade (including the ongoing discussions on a bilateral free trade agreement between the US and India). The US is looking for India to reduce its tariffs on US products, a senior administration official said," according to the WTD.

Several G7 members, such as Japan and the European Union, have strongly endorsed the US’s proposal for introducing graduation/differentiation to deny special and differential flexibilities for China, India, Indonesia, and South Africa, among others, at the World Trade Organization.

But a large majority of developing countries, including India, firmly rejected the US’s proposal and called for “strengthening the World Trade Organization to promote development and inclusivity".

Based on the Indian concept paper, the developing countries categorically said that “the immediate priorities for reform at the World Trade Organization must include: Resolving the crisis in the appellate body (the highest adjudicating body for global trade disputes) and addressing the unilateral actions taken by some members (such as the US)."

Even though the US wants reforms at the World Trade Organization aimed at denying special and differential flexibilities for India and other developing countries in the current and future multilateral trade agreements, Washington is at the centre of paralysing an important arm of the World Trade Organization, namely, the appellate body on controversial grounds that the highest adjudicating body for global trade disputes had deviated from the dispute settlement understanding, a charge which was rejected by a large majority of World Trade Organization members, including the European Union.

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